For much of this year, the drug industry has been in an unenviable place -- the investor's doghouse.
There have been persistent fears of price pressures and nasty surprises, such as Merck's
PDL reported third-quarter earnings yesterday and, for the second time this year, raised revenue guidance for 2004. Investors live in fear of the unexpected, so it's always a pleasant surprise when a company reports an improved outlook. Full-year revenue is expected to come in between $93 million and $95 million, which would be up 40% over last year's revenues of $66.7 million.
The catalyst for this jump has been increasing royalty payments from Genentech's
Another bit of good news is on the horizon with the looming approval of Biogen IDEC
This royalty stream is becoming quite lucrative, and it serves as a bridge that will get the company to the point where it can launch its own drug in the 2007/2008 time frame. The first major product will very likely be Nuvion for the treatment of severe ulcerative colitis. That's another drug worth watching.
For more articles on the biotech industry see:
- Biotech's 5-Baggers: Part 1
- Biotech's 5-Baggers: Part 2
- Biotech's 5-Baggers: Part 3
- The Case for Drug Stocks
- Surviving Biotech's Downturns
Fool contributor Charly Travers does not own shares of any company mentioned in this article.
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